Whether buying or selling a house or other property, most people work with a real estate agent — and for good reason. Real estate agents help buyers find the right house or property within their budget, negotiate favorable terms with the sellers’ agents, and work with the lending bank to finalize contracts and other paperwork. As the listing agent, realtors help sellers price their homes attractively, stage houses to look their best, and negotiate on behalf of the sellers’ best interests. Realtors also work with inspectors, lawyers and bankers to coordinate the various aspects of buying or selling a house or property. In general, realtors earn about 5%-6% of a home’s selling price, paid only when the house is sold. However, like most things associated with real estate, the realtor’s fees and commission may be negotiated. The primary factor in determining realtor fees is the final cost of the house plus closing costs.

Prepping a house for sale

Although commission and the closing costs are paid when a home sells, a few charges are incurred while the home is still on the market. These include appraisal and home inspection charges that are used to make sure the house is worth the price and to discover any problems in the home.

For example, the buyer’s lender will require the home to be inspected by a professional home inspection agent, such as Code 3 Property Inspections in Kyle, Texas, or Perkins Home Inspections in Eaton, Colorado. Perkins Home Inspections charge $235-$285, depending on the size of the home.

Homes must also be appraised for their worth by professionals such as the Terrell Group Appraisal Service in Marietta, Georgia; this service typically costs between $300 and $400.

Photography

Realtors will also work with real estate photographers, such as Weichi Cheng Photography in Anaheim, California, and Haz Pro Homes in Fort Worth, Texas, to take photos of the inside and outside of the home. Haz Pro Homes charges a flat rate plus additional fees based on the home’s square footage, starting at $175 for a 500-square-foot home. Rates go up:

• For 501 to 1,500 square feet, fees start at $275 plus $0.25 per square foot

• For 1,501 to 3,000 square feet, fees start at $400 plus $0.20 per square foot

• For 3,001 to 5,000 square feet, fees start at $550 plus $0.15 per square foot

Staging

Realtors will work with professional home stagers to make sure the home is beautifully staged in order to best show off each room. Some, like Cristina Grossu of Charlotte, North Carolina, will do it themselves, while others will hire professional stagers like Simply Put Home Designs in Gainesville, Georgia. This can be one of the more expensive services, depending on how many rooms need to be staged, how much furniture needs to be rented, and how long the home is on the market. On average, stagers charge $500-$600 per room per month, although a realtor may be able to negotiate a better price on your behalf.

Commission

While commissions vary depending on location and the type of property for sale, on average, a real estate agent’s commission fee is 5%-6% of the final cost of the home. Half of that is paid to the seller’s agent and the other half is paid to the buyer’s agent. For example, a $600,000 house would net a $36,000 commission, and each agent would earn $18,000.

The commission is generally factored into the sale price of the house and subtracted from the proceeds of the sale. Note that the buyer does not negotiate this part of the contract; the commission is between the seller and their agent, and they negotiate the commission fees.

Closing Costs

Unlike the commission, the party responsible for paying the closing costs can be negotiated — and this is often where real estate agents really earn their pay. Because no rule guides who pays these costs, agents representing both the buyer and seller work hard to get the best deal for their client. However, in most markets, the buyer pays for most of the costs, usually 3%-4% of the home’s price; the seller usually pays closer to 1%-3%.

Closing costs are separate from the realtor’s commission; they include a range of fees for processing the loan, recording the deed, insurance, taxes, etc.